Marketing_Equilibrium

Marketing Equilibrating Process Paper Marinique Price University of Phoenix November 15, 2010 ECO/561- Economics Paul Updike In today’s economy, is very prevalent to understand the decision to purchase one item over another item. To supply a certain product over another is also an important concept. “Markets bring together buyers (“demanders”) and sellers (“suppliers”), and they exist in many forms” (McConnel, Brue, & Flynn, 2009, p. 46 ). In this paper, the economic concepts of demand, supply and market equilibrium in relationship with real-world examples will be discussed. “Demand is a schedule or a curve that shows the various amounts of a product that consumers are willing and able to purchase at each of a series of possible prices during a specified period of time; other things equal” (McConnel, Brue, & Flynn, 2009, p. 46 ). For example, the demand for V-tech electronic toys for children may be in high demand, because many parents are involve in their child’s education. Educational toys are important because the parents want their children to advance to a higher level of learning. As the price of V-tech educational toys decrease the demand for it will increase. Many consumers will be willing to buy the educational toys at a lower price, but the child’s learning ability will increase. “ A fundamental characteristic of demand is this: Other things equal, as price falls, the quantity demanded rises, and as the price rises, the quantity demanded falls, this is considered to be the law of demand. “Supply is a schedule or curve showing the various amounts of a product that producers are willing and able to make available for sale at each of a series of possible prices during a specific period” (McConnel, Brue, & Flynn, 2009, p. 51 ). For example, every year on “Black Friday,” many businesses participate in reducing products to enhance sales on different products. Many organizations may reduce prices on such products such as children video games and systems, flat-screen TV’s, computer systems, but only a limited supply will be available for these reduction in prices of merchandise. “As price rises, the quantity supplied rises; as price falls, the quantity supplied falls, this is considered the law of supply” (McConnel, Brue, & Flynn, 2009, p. 51 ). Price in supply and demand reflects the market equilibrium on various products. The price reduction in this merchandise shows how the law of supply is applied. Market equilibrium is the price where quantity demanded equals quantity supplied. Shortages help drive up the cost of goods and services whereas surpluses drive the cost of goods down. “Market equilibrium is also a situation in which the forces that determine the behavior of a variable are in balance and thus exert to pressure on that variable to change” ("equilibrium," 2003). References equilibrium. (2003). In The Penguin Dictionary of Economics. Retrieved from http://www.credoreference.com/entry/penguinecon/equilbrium McConnel, C.R., Brue, S.L., & Flynn, S.M. (2009). Economics: Principles, problems and policies (17th ed.). New York, NY: McGraw Hill/Irwin.